Government to amend public-private partnership regulations

Government will reform public-private partnership regulations with the hope of attracting more private-sector participation.

This is part of National Treasury’s strategy to lift the economy to a higher and more inclusive growth path.

While delivering the Medium-Term Budget Policy Speech (MTBPS) on Wednesday, the Minister of Finance Enoch Godongwana said one of the pillars of growing the country’s economy is through effective infrastructure investment.

Amending public-private partnership regulations

The government’s decision to amend public-private partnership (PPP) regulations is to successfully mobilise significant private-sector financing and technical expertise to increase the limited public sector’s capacity and capability.

“We are amending the PPP regulations to simplify requirements for undertaking these projects,” said the minister.

He said the amended Treasury Regulation 16 will be made public before the end of November 2024 for implementation in 2025/26. While the Municipal PPP Regulations 309 will be finalised by June 2025.

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Private investments needed

“We are establishing dedicated capacity to plan, prepare and design programmes that will generate a credible pipeline of projects that can be taken to the market.”

However, he added there are already projects that need private investment.

The first one is the Department of Water and Sanitation’s Water Partnerships Office which already has two priority programmes for non-revenue water and recycling wastewater that require private investments.

“The resolution of the Gauteng Freeway Improvement Project has unlocked a project pipeline to the value of R85 billion for the non-toll network over the next three years. We are improving the capital budgeting process.”

A guide to submit proposals

Minister Godongwana added that Treasury would make public a guide to submit proposals in January 2025,

The Department of Transport, Transnet and the Passenger Rail Agency of South Africa are finalising a list of priority projects that will be issued to the market in 2025/26 for the private sector to partake in.

“The Budget Facility for Infrastructure is being reconfigured into a centralised gateway for all large infrastructure projects that require fiscal support to advance.”

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Efforts to increase funding

He added that the government is making an effort to increase the number of funders to diversify public infrastructure financing through new mechanisms and instruments.

“These include build-operate-transfer (BOT) structures and other concessions.”

Godongwana said fiscal support is proposed for the projects in the 2024 Budget Facility for Infrastructure (BFI) window.

These include projects such as two hospital projects, including a district hospital in Limpopo; landside capacity expansions at the Cape Town Container Terminal; and capacity upgrades on the rail network from Waltloo to Gqeberha.

“A request for proposals will be issued this year for funders who are interested in supporting these projects, as well as projects for urban rail revitalisation, disaster relief and metropolitan trading services.”

“The outcome will be faster delivery of infrastructure that supports economic growth, the expansion of access to basic services and boosting job creation.”

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